Local governments stop consolidation of China's solar-panel makers: Trina
Local government meddling is preventing consolidation in the mainland's loss-making sector, says the chairman of Trina Solar
Local governments have hampered attempts to use market forces to encourage consolidation of loss-making mainland manufacturers of solar panels and related parts, according to one of the industry's largest producers.
Gao Jifan, the chairman of New York-listed Trina Solar, said that unless Beijing prevented the interference, the industry's restoration to sustainable development would be delayed by three to five years.
"If we can consolidate the industry in three years so that three to five players have a combined market share of 70 per cent, the industry will be in a much healthier state," Gao said on the sidelines of the World Energy Congress in Daegu.
"Owing to local government intervention, such as protection of local brands and imposition of non-market, non-transparent negotiating conditions, consolidation has become difficult."
The industry has several hundred players, and many of them are small manufacturers supported by their local government.
Gao said some local government-backed firms' losses were much bigger than their books indicated because they were propped up by opaque subsidies.
Some local governments insist that subsidies not be reflected in the firms' official financial records, making it impossible for Hong Kong or New York-listed mainland firms to acquire them.